Crist forms foreclosure task force

Problem projected to widen

TALLAHASSEE — Gov. Charlie Crist turned his focus to the state's home foreclosure crisis Wednesday, setting up a task force that will recommend solutions by April 18.

"Foreclosure hurts all Floridians by depressing home values and causing families to lose homes, jobs and hope," Crist said. "As this task force comes together to explore solutions, we will search for ways to restore hope to Florida's families - and to our state's economy."

The number of people on the verge of foreclosure increased steadily in South Florida last year. During the housing boom of 2000 to 2005, many borrowers bought homes that they ultimately couldn't afford.

Nearly 4,500 homeowners were at least 90 days behind on their house payments in Palm Beach and Broward counties in January, according to Realestat.com, a Plantation-based research firm. That's almost three times the number of delinquent homeowners in January 2007.

"The worst is yet to come," said Florida Chief Financial Officer Alex Sink, a Democrat working with the Republican governor.

Crist's announcement came shortly after a group of Democratic legislators unveiled a plan to crack down on subprime lenders.

"The foreclosure crisis is in large part a direct result of abusive tactics in the subprime market and was entirely avoidable," said Sen. Ted Deutch, D-Boca Raton, adding the proposal is aimed at protecting borrowers from getting into unaffordable loans.

The bill would ban financing of points and fees on subprime loans, prohibit balloon payments, require lenders to verify a borrower's ability to pay and ban prepayment penalties.

The Governor's Florida Home Ownership Promotes the Economy (HOPE) Task Force will include experts in the mortgage and banking industries, as well as consumer advocates, policy experts and legislators. It will review Florida's foreclosure rate and its effect on the economy, as well as how the state can help more families avoid losing their homes.

The task force will finish its work while the Legislature is in session, opening the door to a legislative fix within months as well as an executive order by Crist. The annual session starts in March.

Florida had more than 2 percent of its properties in some stage of foreclosure last year, with 279,325 filings on 165,291 homes, more than twice the previous year's total, according to RealtyTrac, an Irvine, Calif.-based real estate company.

Florida, Nevada, Michigan and California posted the highest foreclosure rates, the company said.

Crist and Sink said the group would also be asked to assess public and private financial resources that might be available to help Floridians hold onto their homes. Sink voiced hopes that some lenders would extend the time before homeowners are evicted, giving them more time to work out a manageable financing deal. Sink suggested the state might want to beef up Florida Legal Services to help more homeowners in trouble.

The legislation filed by Deutch and Rep. Scott Randolph, D-Orlando, has already won the support of several consumer groups, including Florida PIRG (Public Interest Research Group).

"With so many Floridians about to face resetting mortgage rates, it's critical that we act now to strengthen Florida's Fair Lending Act and reduce the economic impact these foreclosures are having on Florida," said Brad Ashwell, Florida PIRG's consumer advocate.

Staff Writer Paul Owers contributed to this story.

COMING SUNDAY

The Sun-Sentinel starts a three-day series of articles examining the foreclosure and subprime mortgage crisis in South Florida.

You'll be able to find out how many homeowners in your city lost their houses to foreclosure.

Online

Track foreclosures across South Florida at Sun-Sentinel. com/foreclosures